TSX "DARK ORDER" TYPE

As a user of the Canadian markets it is beyond me how the exchanges get order types like this past the regulators.  The Canadian regulators really are in the back pocket of the institutions who believe they will be the only party benefitting from “Dark Orders”.  These orders types are the complete opposite of providing a fair, honest and transparent marketplace.  I do use these order types personally on a regular basis; if the institutions are foolish enough to believe these order types will only help THEM not be gamed then they truly have another thing coming.

Dark Orders

On March 14, 2011 TSX Markets integrated the TSX/TSXV Dark Midpoint and Dark Limit order types with Canada's most extensive displayed order book providing tremendous value to all market participants by offering meaningful price improvement, significantly reducing trading costs and increasing valuable liquidity seeking options.

The Dark Midpoint and Dark Limit order types both provide full pre-trade anonymity and are eligible to match against all liquidity submitted to the Toronto Stock Exchange and TSX Venture Exchange. Providing our customers with continuous interaction between the dark and displayed books maximizes the value of additional execution opportunities and liquidity seeking options.

The Dark Midpoint order will only execute at the mid-point of the NBBO (National Best Bid/Offer) and may be submitted with an optional limit price. The Dark Limit order will only execute at or within the NBBO.

For a detailed description of our dark order types and their attributes please see the “Toronto Stock Exchange, TSX Venture Exchange Dark Liquidity Guide” available through the link below.

Benefits

Posting Dark: 

• FREE, no cost to post your order dark 
• Continuous exposure to the primary displayed venue, the most ‘streaming liquidity' in Canada, and therefore the best possible fill opportunities
• Facilitates the execution of large blocks which may be difficult to achieve on transparent markets due to lack of depth in the order book
• Protect client's proprietary trading information through complete pre-trade anonymity – no IOIs or selective access

Seeking Dark:

• For those seeking dark liquidity, the integrated order book minimizes client's routing latency and opportunity costs by executing against dark and visible orders within one destination and with one transaction
• No need to ‘ping' separate dark pools – by sending an order to TSX, we will automatically seek dark opportunities, while executing at the best visible price with trade through protection
• Provides liquidity takers with both meaningful price improvement and lower transaction costs (i.e. taker fee)
• Low latency dark trade executions through the Quantum technology with a single allocation sequence

Dark liquidity is immediately accessible:

• Efficient access - Dark orders are instantaneously available to customers through existing connectivity to TSX and TSXV, no “Opt IN” is required
• Low cost : Virtually no technology or integration costs – no additional routing destination

Read more about these order types in the below PDF document.